KUALA LUMPUR (Nov 22): TH Plantations Bhd’s third quarter net profit slumped 40.27% to RM11.45 million from RM19.18 million a year ago, due mainly to higher finance cost.
Revenue for the quarter ended Sept 30, 2017, however, improved 11.29% to RM189.54 million from RM170.31 million, on higher production and sales volume, as well as higher realised crude palm oil price.
TH Plantations declared an interim dividend of 1.6 sen per share.
In a filing today, TH Plantations said the production of fresh fruit bunches (FFB) during the quarter improved 7.41% to 37,348 tonnes, while the average selling price of crude palm oil (CPO) rose 4.61% to RM2,564 per tonne from RM2,451.
“Most upstream plantation players, TH Plantations included, have shown steady improvement in FFB production, signalling the end of the industry’s weather woes and better days ahead,” said TH Plantations chief executive officer and executive director Datuk Seri Zainal Azwar Zainal Aminuddin.
He noted that the prices of CPO and other palm oil products have remained stable, despite initial fears of prices weakening when stocks are replenished. “These positive developments augur well for the industry, which has suffered two years of struggle,” he added.
For the cumulative nine months, net profit rose 52.23% to RM29.85 million from RM19.61 million a year ago, thanks to higher operating profit as a result of higher government grant.
Revenue for the January-September period surged 30.28% to RM511.01 million from RM392.23 million previously on higher average selling volume and realised prices for refiner palm products.
“We are encouraged by our performance thus far, and with the immense potential shown by our portfolio of plantations, we are optimistic that we will be able to deliver more value to our shareholders in future,” said Zainal Azwar.
“However, we are mindful of the possibility of La Nina, which may affect production in the coming months, shortage of labour, as well as the volatility of prices given the stiff competition from other vegetable oils.
“Imposition of higher taxes and other trade barriers by other governments may hamper the development of the palm oil sector too,” he added.
Nevertheless, Zainal Azwar said the palm oil outlook remains encouraging as industry players continuously look for ways to optimise costs, increase efficiency and internalise sustainable practices throughout their operations.
TH Plantations’ share price dropped 1 sen or 0.92% to close at RM1.08 today, giving it a market capitalisation of RM954.56 million.